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Interest Rates In Holding Pattern

The 10 year treasury is holding flat in the 4.04% area this morning which is up just a few basis points from the close yesterday. Looking at the economic calendar there is nothing really there–nothing yesterday, nothing today and little tomorrow so this would seem to indicate that rates are going to hang in a narrow band until we get to the consumer price index (CPI) on Thursday. After the strong jobs reports last week investors are a bit leery of the supposed rate cut from the FOMC in March–right now the odds are 57% that the rate gets cut–this is down from a number in the 70%’s. A hot number Thursday (CPI) and/or Friday (PPI) will put a stake in these dreams. We have no data at this point that says ‘cut rates’.

Equities are a bit lower this morning, but markets still have lots of opportunities to move higher as ‘dry powder’ is everywhere–and available quickly. As always I am not dependent on equities moving higher I just don’t want them moving too fast–either up or down–take it slow!!.

Yesterday we had mREIT MFA Financial (MFA) price a new issues of baby bonds. The 4 million share issue prices at 8.875%. For me it is a ‘no thank you’. The good part of this issue is that it has a maturity of 2029. The short maturity date will keep the price relatively stable.

Yesterday I did no buying or selling. Actually I see a few issues I could sell–but have no buys on my radar at this minute–guess I better get busy looking harder again, because I hate to contemplate a sale without an identified buy option. The Brighthouse Financial preferred I just bought jumped 50 cents yesterday–makes me question buying a small position with plans to go back in for more–I may have to up my initial buy quantity. We’ll see if it trades back down or if it trades up to my $23/share target right away..

7 thoughts on “Interest Rates In Holding Pattern”

  1. CME Fedwatch Tool ~ 95% probability of Fed holding at current target rate for Jan 31 meeting.

  2. Wish I had bought more of the BWBBP that was a good call. Don’t know if you have noticed but a lot of bank preferred have really moved up.
    I trimmed a few positions of holdings I had recently collected the dividends on and I am happy to hold the cash for now.

    1. Charles–with the benefit of 20/20 hindsight wish I had more also–BUT I made good profits so I can be happy with that. Still have a decent position in a couple of them and may trim them back soon.

      1. The market might have to do some backfill on the >$1 jump — I wonder if Moron pumped it in private.

        1. GARY–the spread is pretty wide today–might put in a GTC sell order and see what happens.

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